Threatening Margins
In countries including Tanzania, cheap imports, including from China, are weighing on prices and threatening margins for local producers. South Africa in May imposed anti-dumping duties on the material coming from Pakistan. The issue continues to challenge producers on the continent, analyst Baldeira said from London.
Even so, the two biggest cement producers in Africa aren’t the only ones expanding. Johannesburg-based PPC Ltd. is building new plants in the Democratic Republic of Congo, Zimbabwe and Ethiopia, and has started production in Rwanda. HeidelbergCement AG of Germany added 2.9 million tons of capacity in Africa last year, its biggest growth region. The company’s pending takeover of Italcementi SpA may double its market share in the Middle East and Africa, according to data and HeidelbergCement predicts that cement demand will expand 50 percent by 2020 in the Africa region.
“Capacity is not enough to meet demand in these countries,” Baldeira said. “When we think about the future of the world demand for cement in the next 10 years, Africa will be a big driver.”
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